Handbooks of Research on International Political Economy series
Edited by Alessandro Bonanno and Lawrence Busch
Chapter 12: Finance and the food system
The increasing power and prominence of finance has transformed the face of capitalism over the last four decades. The U.S., which had shifted from an agrarian to an industrial society in the early 20th century, began a new transition in the 1970s toward a post-industrial society revolving around financial markets (Davis 2009). Financial imperatives have come to shape the way that we see the world: national governments must worry about their credit ratings, the health of corporations is judged by their stock price, while our skills and relationships become so much human and social capital. This unfolding process is often referred to by the term financialization. This pervasive re-orientation toward finance has transformed the agro-food system. Financial actors are increasingly investing in the food system and expecting good returns on their capital, while corporations involved in food and agriculture are themselves undertaking financial activities as a way to increase their profits. This growing focus on financial profitability does not benefit everyone, and in some cases it even comes into conflict with the food system’s (presumed) purpose of food provision.
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